Orinoco Projects Could Double Output in 2-3 Years

The CVP affiliate of Venezuela's state oil firm PDVSA that oversees contracts with domestic and foreign oil companies has reiterated its plan to increase its present stake in four Orinoco extra-heavy crude projects to 60% and said once negotiations are completed it will seek to double production there to 1.2 million barrels a day (Mb/d).

"This negotiation will be based on [production] growth; the compensation will be additional production," del Pino said.

PDVSA will put up money for new investments after increasing its stake, according to del Pino.

"We're telling the partners we should implement new technology to improve [oil] recovery and this will entail large investments," he said.

The 100% increase in production will take 2-3 years and involve "new drilling and enhanced gas injection," del Pino said. The injection is a problem since Venezuela is currently suffering a natural gas deficit of about 1.4 billion cubic feet a day.

"By the end of the year we should have reached agreements for these production increases," del Pino said.

PDVSA has a sizable stake in each of the current Orinoco projects: in Ameriven (formerly Hamaca), where it partners with US oil majors ConocoPhillips (NYSE: COP) and Chevron (NYSE: CVX), it has 40%, making it the majority partner; in Cerro Negro, where it partners with ExxonMobil (NYSE: XOM) and the UK's BP (NYSE: BP), PDVSA has 41.67%, a stake equal to Exxon's; in Sincor, PDVSA has 38% to the 47% held by France's Total (NYSE: TOT), with Norway's Statoil (NYSE: STO) owning the rest. In Petrozuata, again with ConocoPhillips, PDVSA has 49.9%.